Capital idea: Alan Barton reaps the fruits of a strong local venture capital market.

Capital idea: Alan Barton reaps the fruits of a strong local venture capital market When attorney Alan Barton signed on with Paul, Hastings, Janofsky & Walker seven years ago, the Los Angeles-based law firm had no lawyers devoted to venture capital practice. Today Barton heads up a team of more than 20 lawyers immersed in venture capital transactions, and he plans to add six or seven more lawyers by summer's end. Why the growth spurt?

"Well, No. 1, there has been growth in the number of companies financed by venture capital in Southern California, as well as an increase in the amount of venture capital available," says Barton, a University of California at Berkeley student and Boalt Hall law grad. "And No. 2, I think we have done a good job as professionals in letting people know we are interested in venture capital and mean to be an important factor in it." As a venture capital market, the Los Angeles area is perhaps the best in the country, says Barton, ranking only behind New York in terms of available capital, and equal to Boston's Route 128 and the Silicon Valley in terms of firms wanting venture money.

To service such a large market, Paul, Janofsky -- the sixth-largest law firm in Los Angeles County according to a Los Angeles Business Journal survey -- has a team of seven venture capital lawyers downtown, seven in a Costa Mesa office and another seven at Barton's Santa Monica warrens, where his Ocean Boulevard office has a view of the curving Pacific Ocean shoreline.

The sheer number of lawyers has had an effect. "I am not aware of any other law firm as active as we in this area (in venture capital) or that has devoted as much resources to it," asserts Barton.

Barton's latest big deal is a $12.5 million private equity placement for International Furniture and Accessories Mart Inc., a new firm that will import and retail European-style furniture through outlets with the Swedish name of STOR, with the first store slated to open in October. Barton's team served as counsel to the furniture retailer, which is headed up by former Ole's chairman and chief executive Harvey Knell. Barton reveals that Security Pacific Capital Corp., a subsidiary of the bank holding company, was a major investor.

Another way Barton's crew has expanded so fast is by acting as counsel to all the players in the venture capital game, from firms needing cash to institutional investors to underwriters to bank trust departments. The firm's client list reads like a Who's Who of the venture capital game and includes such venture capital funds such as Brentwood Associates (ranked No.1 among area venture capital firms by a Los Angeles Business Journal Survey). Interven Partners, and U.S. Venture Partners.

Paul, Hastings is also counsel to small growth firms such as American Video Tape Manufacturing Co., Techmedica Inc. (a Westlake-based prosthetic joint maker) and Tuneup Masters Inc.

Additionally, Barton's team has represented investment bankers Merrill Lynch, Montgomery Securities, Morgan Stanley and Seidler Amdec Securities among others on public underwritings, private placements and merger and acquisitions. Paul, Hastings is also special counsel to Bank of America's trust department, which manages corporate pension funds invested in venture capital partnerships.

Last year Barton's Santa Monica team served as counsel for a deal with an aggregate value of $350 million, and helped with the formation of funds with capital comittments of $500 million. Barton credits fellow Paul, Janofsky lawyers Mike O'Connell, Richard Roeder and James Hamilton for the healthy market niche he has cut out for his firm.